An Insider’s Perspective on Fundraising for Startups in 2022

As journalists, it’s not often that we see firsthand what goes on behind the scenes in the industry we cover. But that’s what I had the chance to do here at Crunchbase News, with announcement

As journalists, it’s not often that we see firsthand what goes on behind the scenes in the industry we cover.

But that’s what I had the chance to do here at Crunchbase News, with announcement today by Crunchbase that he raised $50 million in a Series D round led by Alignment Growth.1

The funding comes during one of the toughest times for late-stage startups to raise capital in years. As we’ve extensively reported, 2022 venture funding is down sharply – albeit from last year’s record highs – and the downturn only accelerated in the second quarter.

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Many startups are raising capital at deflated valuations, and tech layoffs have accelerated over the year. With IPO markets effectively at a standstill, early-stage startups had a particularly tough time: Funding for these companies in Q2 fell 31% quarter-over-quarter and 38% from one year to the next.

The Crunchbase funding highlights some big themes we’ve seen in our reporting this year.

Stable as it goes: It’s been almost three years since Crunchbase has increased its Series C funding. Over that time, the company has steadily built a strong prospecting software business that is on track to double ARR this year, putting it on the path to profitability. The company’s cash burn is also low and we continue to hire at a healthy pace (including some recent hires to my team, see below).

This contrasts with the many startups we’ve seen in the past year that took all the capital investors would throw at them, sometimes raising big back-to-back funding rounds in a matter of months. Many of these companies have since laid off or, in some cases, completely imploded despite raising huge sums from venture capitalists.

Cash is king again: With the sharp turn in the venture capital market this year, the grow-at-all-costs approach has fallen out of favor with investors, who now want startups to be cash conscious and have several years of trail ahead of them. .

What is the value of an appraisal, anyway? Notably, Crunchbase does not reveal its valuation with this latest round. But it’s worth saying that in general, and especially in today’s fundraising environment, valuations don’t really matter until they’re actually validated in the market. We’ve seen that pre-IPO companies, including Klarna and instagram cope with steep declines in valuation. At the end of the day, the only valuation that really means anything to a startup’s investors and employees is the one attached to an exit.

More news on the news…

The D-Series announcement isn’t the only exciting news here. We recently added two new reporters to the Crunchbase News team to further expand our coverage:

  • Christine Kilpatrick has joined us as Special Projects Editor, a newly created role in which she manages Crunchbase News’ growing editorial calendar of larger projects and initiatives. These include our monthly and quarterly venture capital funding reports and our suite of landing pages, home to The Crunchbase Unicorn Board. Christine is a very experienced writer who previously worked at the San Francisco Business Times (where I had the good fortune to work with her), The Information, and Engineering News-Record. With Christine at the helm, expect us to roll out more focused coverage on a variety of big topics this year. You can reach her at [email protected]
  • Keerthi Vedantam has recently joined our reporting team to lead our coverage of healthcare and biotech startups and venture capital funding. It will also cover VC-backed businesses in the wellness, food tech and agtech sectors. Keerthi joins us from dot.LA, a publication covering the Los Angeles tech scene. There, she quickly carved out a niche for herself covering the region’s biotech sector in depth. Prior to that, she reported on enterprise technology at Business Insider. Keerthi has already started and I can’t wait to see what she will accomplish here. Reach her at [email protected] with tips and ideas and follow her on Twitter at @KeerthiVedantam.

With our growing team and a stable, well-funded business behind us, expect to see Crunchbase News coverage continue to grow this year. As always, please feel free to contact us with comments, topical tips and story ideas.

Marlize van Romburgh is the editor of Crunchbase News.

Drawing: Dom Guzman

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